International Political Economy

Lecture 1: What is International Political Economy?

2026-01-20

Introductions

About me

Who I am:

  • I am a political scientist

  • I am a post-doctoral researcher, I work with Prof. Strijbis on his project DIVIDE

  • I am at Franklin since November 2025. Before, I have lived, studied, and worked in Italy, the US, and France

  • If you are curious about my background, you can check my website

How to reach me:

  • Office: LAC 8
  • Office hours: Tuesdays and Fridays before class, 12.30pm-2.30pm
  • Email

Our goals

In this course, the goal is that you

  • Learn about current topics and debates in IPE

  • “Think like a social scientist” when interpreting news and events: critically and with analytical rigor

  • Draw lessons from history

To do so, I want us to communicate as much as possible during the course

  • This is an interactive course and you will do most of the job in class

  • Use office hours to clarify doubts, ask questions, discuss progress

  • I am also interested in continued feedback from you about the course

About you

In a few words, say:

  • Your name
  • The place you call “home”
  • Your first memory related to international politics or economics (broadly defined)

Course overview

What is IPE about?

International Political Economy (IPE): the study of interactions between economics and politics in the world economy

This definition encompasses different levels of analysis:

  1. Relations between states: states are “autonomous” agents that interact with others

    • e.g., take part in international institutions, trade, sign treaties
  2. Domestic sources of international politics: what drives states’ posture in relations between states

    • e.g., accountability to, and representation of, domestic voters and special interests
  3. International sources of domestic politics: the repercussions of international events or trends in domestic societies and electorates

    • e.g., economic transformations, political changes

Our approach in this course

IPE is a subfield at the intersection of political science and economics. We will look at the world through the glasses of analytical (quantitative) political science

  • We will learn how (many if not most) contemporary political scientist analyze complex macro-level phenomena

  • That is, dissecting them into component parts within a unifying framework: rational choice

  • In short: people, politicians, governments, states… (actors) have goals and motivations and behave (act) according to them. In order to understand their behavior we need to start from what drives them

  • The goal is to generate knowledge of facts that is generalizable across space and time

Important: mathematical or statistical training is neither necessary nor required for this class. Our focus is on understanding and applying concepts

Requirements

The final grade is based on

Assignment Date due Midterm weight Final weight
Paper presentation and discussion (in groups of 3) Presentation dates: February 17, April 14 0% 20%
Midterm exam March 3 60% 20%
Research design (individual) Due on Moodle by April 24. Short class presentations on April 28, May 1 0% 40%
Class participation Ongoing 40% 20%

See the syllabus for instructions on the group presentation and the research design

You as a group will coordinate to form groups for the paper presentation and fill the group document with your names by the first week of the course

Franklin events with external speakers relevant for the course are part of the syllabus

Class materials

  • Articles: Digital copies posted on Moodle
  • Book chapters: Digital or hard copies available in Grace Library
  • Slides: posted on Moodle and available also on GitHub

AI policy

By the University’s policy:

  • You are required to disclose the use of generative AI in your assignments
  • Submitting material not authored by you without proper acknowledgment will be considered plagiarism

More generally, you must reflect on the difference between using AI to help you learn and allow your unique talents to emerge and using AI to pretend you have learned

Questions?

Approaches to IPE

What is IPE

We can view international political economy as the intersection of the substantive area studied by economics – production and exchange of marketable means of want satisfaction – with the process by which power is exercised that is central to politics.

Keohane (1984, Ch. 2)

Liberalism

Adam Smith

David Ricardo
  • The core actors are individuals as producers and consumers

  • Free trade is a “positive-sum” game which makes all parties involved better off

  • Free markets are the most efficient way to allocate resources

  • Economics and politics are autonomous domains (and should not be mixed)

  • The government’s role should be limited to setting “fair” rules of the game and provide public goods (e.g., property rights protection, defense…) so that the market can flourish

  • Absence of conflict is natural: mutual economic interest from trade prevents wars

Marxism

Karl Marx

Vladimir Lenin
  • The core actors are the classes: capitalists (owners of means of production) and workers (owners of labor)

  • The economic-political system is shaped by capitalism and conflicting economic interests

  • Politics is subordinated to economic forces

  • Capitalism expands globally to find new markets and exploitable labor \(\implies\) imperialism

  • Capitalism creates a hierarchical international system (core-periphery). This system maintains peripheral countries underdeveloped

  • Conflict is natural

Realism

Niccolò Machiavelli

Carl von Clausewitz
  • The core actors are the states

  • States’ decisions are driven by power, its use and the desire to increase it relative to other states

  • Economics is subordinated to political forces

  • States can undermine free trade (e.g., reduce their engagement or monopolize parts of the economy) if this can strengthen their power vis-a-vis other states in other ways

  • Absence of conflict is possible if a single actor is so powerful to enforce rules \(\implies\) Hegemonic stability

(New) Institutionalism

Ronald Coase

Robert Keohane
  • The core actors are states

  • States have common interests, but self-interest prevents from pursuing it

  • They create institutions (codified “rules of the game”) to enforce cooperation for mutual benefit

  • Economics and politics interact through the incentives and rational choices of states

  • Absence of conflict (cooperation) is not natural, but can be achieved

The rational choice approach

All traditional theories provide important, sometimes crucial, insights. In contemporary political science, the prevailing methodological framework (and the defining methodological framework of economics) is rational choice

New Institutionalist theory is an example of rational choice theory

There are several advantages. We can incorporate some key insights of traditional theories

  • Self-interest
  • Conflicts of interest
  • Inequality in power and wealth
  • Interactions of politics and economics
  • Institutions
  • etc.

The rational choice approach

The rational choice approach is built on a few general postulates:

  • The individual is the basic unit of analysis
  • Individuals have motivations (preferences) and beliefs about the world (due to uncertainty)
  • Their choices are constrained by objective limitations or existing rules
  • Individuals act (choose actions) according to their preferences, beliefs, and constraints

Of course we generally don’t know preferences or beliefs of others. We use assumptions about them to build models that can explain patterns of behavior. It is well understood that models are “wrong but sometimes useful”

Methodological individualism does not mean that we believe all people are selfish in a caricatural sense or have only material motivations.

We will see that it is difficult to understand the backlash against globalization without non-material concepts such as pride, dignity, community, culture

Incorporating these concepts into rational choice is challenging, but many people (including the DIVIDE team) work on that all the time

The advantage of RC is to allow us to examine what assumptions fail in the model and to work to improve them

Actors and relations in IPE

Recall the different “levels” of analysis. We can now give them a structure in terms of actors and relations

  • We often want to “aggregate” up to the level of states or governments to study macro-phenomena

  • Is it correct? It depends

  • Treating states as unitary actors in a model is equivalent to assuming that who runs the state has full mandate on international issues (or that only their preferences matter)

  • Whether this is justified or not depends on the specific theory

  • The RC approach helps us understand and evaluate constraints of high-level actors and the consequences of their actions

Next

We will use the rational choice framework to understand the nature of problems that require international cooperation

That is, problems where “individual” incentives may clash with collective goals (trade liberalization, climate change, etc.)